Mobile P2P payments in the US are booming with consumers sending each other billions of dollars through (some) digital apps.
Last week, JP Morgan Chase announced it will follow suit of many other notable others and shut down its mobile wallet app Chase Pay in the bank’s third reversal on digital offerings in three months. However, Bank of America BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, Citibank, and Wells Fargo owned Zelle, says it has record-breaking P2P payments use with its active customers already completing more transactions this year than all of 2018. Bank of America said in under nine months, clients sent and received a total of 163 million transactions. That compares to 157 million transactions for all of last year.
“Our 37 million digital banking clients are driving the person-to-person growth trend,” said David Tyrie, head of advanced solutions and digital banking at Bank of America. “Thousands of Bank of America clients are adopting Zelle each week and we are on track to surpass 9 million active users by the end of the year.”
Digital payments are taking off in the US as consumers get more comfortable sending money to friends, family, and co-workers through a digital app. Zelle and rival Venmo, owned by PayPal, are the leading players although others including Square Cash are holding their own.
As of the end of 2018, there were more than 80 million mobile phone P2P payments users in the US, amounting to more than one-third of mobile phone users. That’s projected to hit more than 90 million by the end of this year, according to market research firm eMarketer. By the end of 2022, eMarketer predicts over half of mobile phone users or 52.5% will have made at least one P2P payment within the past month. The growth will be driven by millennials, the research firm predicted.
That’s the case at Bank of America where 68% of its Zelle users are millennials. The bank said during the second quarter customers sent and received $18 billion through 69 million Zelle transactions nearly doubling the number of transactions from last year’s second quarter. Millennial customers are using it to pay rent, split utilities, for family care and gifts. But it’s not just consumers who are using Zelle. Bank of America said 180,000 small businesses used the service since it made it available to them in June.
Zelle isn’t the only P2P payment provider that’s enjoying good growth, rival Venmo processed $24 billion in payments during Q2 2019, growing 70% year-over-year. Meanwhile Square, is seeing good demand for its Square Cash app, which is a direct rival to Venmo and Zelle. Instinet said the Cash App was downloaded 2.4 million times as of the end of July. Square’s Cash App, had revenue of $135 million in Q2 2019.